In Comparison with a Perfect Competition, a Single-Price Monopolist with the Same

question 208

Multiple Choice

In comparison with a perfect competition, a single-price monopolist with the same costs creates a ________ consumer surplus and makes a ________ economic profit.

• A) smaller; larger
• B) smaller; smaller
• C) larger; larger
• D) larger; smaller

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Definitions:

Cost

The amount of money or resources expended to obtain, produce, or maintain an object or service.

Sales

The revenue a company earns from selling goods or services.

Gross Profit

The difference between sales revenue and the cost of goods sold, before deducting operating expenses, interest, and taxes.

Expense

Outflows or using up of assets as a result of the company’s efforts to generate revenue.